2016 2 IceCap Global Market Outlook

8/20/2019 2016 2 IceCap Global Market Outlook

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Our view on global investment markets:

February 2016 – “Journey to the Center of the Earth”

Keith Dicker, CFA

Chief Investment Officer

[email protected]

www.IceCapAssetManagement.com

Twitter: @IceCapGlobal

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Running to safetyAnd just like that - the three explorers were in a tough spot.

Ascending through the collapsed cave would most certainly trigger

additional falling rocks, and if that didn’t end their day, the bone

rattling, teeth crackling electrical storm outside would.

The only way to avoid certain danger was to journey further down -

to the center of the earth. Yes on its own, the center of the earth did

look bad – how could it not, but compared to the alternative it had to

be better.

And it was better, much better. Arriving at the center of the earth

provided safety, comfort and relief.

This was the reward for avoiding the dangers above.

* * *

English mountaineer Joe Simpson, also found himself with a difficult

decision. After summiting the unclimbed west face of the Siula

Grande, the climber found himself trapped, hurt and alone in an

unclimbable crevasse. Attempting to climb out of the crevasse wasboth physically impossible and a near certain cause of death.

To save himself, Joe did the unthinkable – he ventured further down

into the crevasse towards the center of the earth. He too made the

decision to avoid certain danger and it too paid off. Upon reaching

the core, Joe found a way out to sunshine, warmth and friends.

This was his reward for avoiding the dangers above.

* * *

Today, our financial world is fraught with trouble. And if you step back

just far enough, you’ll see that just as explorers and adventures avoid

certain trouble, so too will foreign capital.

And when foreign capital sees trouble everywhere, it too runs for

safety towards the center of the earth - which to the chagrin of many,

is the United States of America and the US Dollar.

Of course, there are many skeptics about the USA being the financial

center of the earth. After all, the Americans also have their financial

backs up against the wall.

However, what these skeptics are missing is the fact that the rest of

the world is in worse shape, and the USD is the only market big

enough on the entire planet to absorb these types of capital

movements.

The Roller CoasterWell, that escalated quickly.

Since our last IceCap Global Market Outlook, it seems like every

market has boarded a hand basket on its way to that very hot and

unpleasant place.

February 2016 Journey to the Center of the Earth


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Another word for…We’ve been told that no investment was safe:

- American stocks plummeted -14%

- Italian stocks crashed -22%

- Chinese stocks collapsed -28

- Canadian stocks plunged -13%

- High Yield bonds dumped -7%

- Emerging Market bonds stooped -5%

- Oil tumbled -37%

Tough numbers and tough synonyms indeed.

Yet, claiming no one escaped is not entirely true at all. In fact, manydifferent parts of the market did escape the long, overdue correction.

The USD increased against virtually all currencies. Currencies from

Canada, Australia, Mexico, Russia, and South Africa were especially

hit hard.

Should investors from these countries be alarmed? Yes and no.

Yes, in that the sharp currency moves means these local economiesare almost certainly headed for recession (if they are already not

there).

No, in that investment portfolios could be protected by holding USD.

If they held USD, then these local investors likely enjoyed positive

returns - but only if they invested in US Dollars.

IceCap has written, spoken and tweeted (@IceCapGlobal) many times

about the importance of getting the currency call correct AND

positioning it properly in your portfolio.

Of course, it’s funny how seemingly everyone in the investment

business has perfect hindsight.

Over the last 2 years, IceCap has been on record with our very strong

expectation for a surging US Dollar. We’ve said no currency will be

safe, and that the best way to play this would be to hold your US Dollar

exposure OUTSIDE of your stock holdings.

Our reason for this is that holding US stocks exposes you to two

completely different market risks:

1) Currency risk

2) Stock Market risk

And based upon what has happened in the stock market over the last

few months, the reason should be perfectly clear.

Yet, every time over the last two years when IceCap very clearly statedour expectation for the USD to rise, the reactions usually consisted of

disbelief and denial.

Today however, investors and advisors everywhere are all too familiar

with the strong USD story, with many claiming that they saw this

coming, or that their client portfolios were well protected.


https://twitter.com/IceCapGlobalhttps://twitter.com/IceCapGlobal


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Not your faultYet, with year-end investment statements hitting kitchen tables many

investors are feeling their jaws hitting the table.

It turns out, the stock market is a lousy place to hedge currencies.

If you’ve been hurt by the sharp market movements over the last few

months, there’s no need to fret – there will be plenty more

opportunities to climb out of trouble, or towards safety.

And it all starts with finally recognising and admitting that yes, the

financial, economic, political and social world is changing very

quickly. Once you embrace this perspective, you’ll at least have theopportunity to avoid the near-certain risk zones, and quite possibly

finding safety at the center of the earth.

Bullish or Bearish?We find it interesting how people view markets. For starters, most

people are inherently bullish, or optimistic.

After all, positive thinking is inspirational. It’s contagious. It’s

enriching. It’s fun!

On the other hand, negative thinking can only drag you in one

direction - down. We’re told to shed negative thinkers out of our

lives. Negative thinking is wrong, it brings everyone down.

On many levels, this makes sense – except in financial markets.

Unfortunately, our investment world isn’t always fun. Yes, sometimes

our world is a drag and recognising when this is happening, is the key

to investment management.

To demonstrate the truth behind this fact just recognise that if you

lose 50% of your investment, you need to make 100% to get back to

where you started. Obviously, avoiding these sharp downturns is

desired by every investor.

Of course, this inherent bullishness is really not your fault. After all,

the single biggest and best bull market of all time started in 1982 and

dazzled everyone until the year 2000.

And with the stock market zooming +1099% higher during these

golden years, one cannot really be faulted for believing that stocks

always shoot to the moon – the trick is to simply hold tight, never sell,

and most important of all, ALWAYS remain positive.

This positive or bullish thinking also dominated the bond market. Just

as the stock market was soaring higher, so too was the bond market

scoring a +592% return during the same time.

This settled it – positive and bullish thinking was a pretty awesome

way to make money.

Or was it?

Interestingly, if we were all born 20 years earlier and told people to be



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Blame it on the rainbullish and optimistic about the stock market, you would have

received a whack in the head.

The justification for being whacked of course, was due to the stock

market returning just +33% in total over a 16 year period from 1966 to

1982. That’s an average annualised return of just +1.7%. And when you

consider the market had dips of -26%, -36%, -45% and -27% it

becomes rather obvious why few dared to be positive, optimistic or

bullish about the stock market. It wasn’t fun at all.

This brings us to 2016.

We would argue that anyone who has lost money in the stock market

should squarely place the blame on the 80s and 90s. After all, this was

the period that set either your market expectations, or the

expectations of your mutual fund sales person.

Clearly, all markets (stocks, bonds, currencies, commodities, real

estate and others) move in cycles. Some cycles are quite short and

easy to see, enjoy or avoid.

Others are rather long, difficult to ascertain and benefiting from seeing

the cycle usually goes completely against today’s instant gratification-

demanding society.

As you’ll agree, being objective and impartial towards all markets not

only makes intuitive sense – but it has also been proven over time. The


trick is having the determination to see beyond what you’ve always

been led to believe.

However, from a business perspective, it’s actually pretty hard for the

average investor to avoid this subjective thinking.

Most investors today have their wealth in a mutual fund of some sort.

These mutual funds have a very specific mandate meaning it will never

deviate from what is was created to do.

The bond fund was built to invest in bonds, and bonds only. The stock

fund was built to invest in stocks only. Same for real estate funds, and

commodity funds. Caveat Emptor.

Each of these funds have an individual or team that decides what to

buy and sell, and the fund charges a fee for doing all of this very

difficult work.

Naturally, the more money people invest in these funds – the higher

the fees charged and the higher the bonuses paid to the people

running the fund.

Now consider the answer you receive whenever you ask these

managers the question of whether you should sell out of the fund.

Yes, the answer is always the same.

At the market high in March 2000, stock mutual fund managers all

answered – stay invested. And then at the eventual 2002 low, they


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Stay


all answered – stay invested. The same answers were also at the

market highs in 2007 and the lows of 2009. Accordingly, there’s never,

ever a reason to sell stocks.

The same is true for bond funds – apparently there’s never a good

time to sell a bond fund either. The bond fund manager will always

have very special reasons for staying in the fund.

Yet in 2014, IceCap counted ZERO reasons why we would want to be

invested in a High Yield Bond Fund. Yet, every High Yield Bond mutual

fund manager listed countless reasons why you should not sell and

stay invested in their fund.

And, if you ask around there’s never a good time to sell an Energy

fund, a preferred share fund or a stock dividend fund. The answer is

always the same – stay calm, stay invested, stay positive and most

important of all, stay BULLISH.

Granted, there certainly are times when you should stay invested, but

those times were long ago, they are history and they have nothing to

do with today’s investment landscape. Investors certainly shouldn’tlive in the past, nor should they steer their wealth using a rear-view

mirror.

Understanding why you are encouraged to stay bullish and stay

invested is likely one of the best pearls of wisdom you can cherish.

Which brings us to a question we often face – is IceCap BULLISH

or BEARISH? To which we always respond – on which market?

We live, work, breathe and invest in a multi-dimensional world. It’s

beyond us how anyone can quickly claim to be BULLISH or BEARISH.

If you are BULLISH on one market, by default you are BEARISH on

another. And since, every market is connected you are either explicitly

or implicitly BULLISH or BEARISH on all other markets.

So for the record:

- IceCap is BULLISH on the USD and BEARISH on other currencies.

- IceCap is BULLISH on stocks and BEARISH on bonds- IceCap is BULLISH on non-bank stocks, & BEARISH on bank stocks

- IceCap is BULLISH on deflation and BEARISH on inflation in USD

- IceCap is BULLISH on inflation and BEARISH on deflation in non-USD

- IceCap is BULLISH on short-term interest rates and BEARISH on long-

term interest rates

As you can see, labelling IceCap or any manager as BULLISH or

BEARISH, certainly requires clarification.

As well, these views and perspectives are long-term, which means the

interim will see plenty of tactical changes. A manager may be BULLISH

on the stock market in the long run, yet the manager should very well

remain open to seeing downside risk during the short-term.

The over-riding point is that, an investment manager should have no

incentive to remain invested in any market all the time. Of course, it


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Conceptually appealing


also means the investment manager should have no incentive to never

invest in any market.

Investment managers should be agnostic towards all markets.

Otherwise, why are you even paying them a fee to manage your

wealth?

Journey to the Center of the EarthTo many, the investment industry is a pretty confusing place. It tells

you managing money is complicated, it’s sophisticated and it’s way too

difficult to explain to the masses.

We disagree.

There’s really two very simple concepts to understand:

Concept # 1

Government

Money

Private

Money

Concept #1: All the money in the world is really divided into two pots,

one is government controlled money, and the other is money owned

by everyone else (private sector).

Government money is sticky – it never leaves where it is sitting. It may

move around on the fringes, but by large it stays where it is until

it is spent (and it is ALWAYS spent).

Private sector money behaves differently. It is not sticky. During normal

times, private capital will swish around the globe seeking to maximise

its return at the lowest risk possible.

BUT, during unusual times private sector money flees from trouble. Itwill run from trouble faster than George Costanza escaping a house on

fire.

Whereas government money rarely behaves in a rational state, private

sector money will always be rational. It will avoid losses because as we

all know a 50% loss in anything, requires a 100% loss to get back to

where you started.

Which brings us to the Journey to the Center of the Earth andConcept #2.

Chart 1 (next page), shows how Private Capital moves. First, note that

the USA and the US Dollar is (currently) the core or center of the

financial world. It is the biggest stock and bond market, and the only

currency in the world that can get you out of trouble in any dark alley

anywhere in the world.


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Chart 1: Concept #2


China Brazil

India Russia

Canada

Australia

Europe

Japan

USA

Source: IceCap Asset Management Limited, R. Canning


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It’s not on TVNext, see the markets and countries as you move outward from the

center. Europe/UK and Japan are next in the global pecking order.

Followed next by Canada and Australia.

These markets are all developed world countries and in the financial

world, they are considered to be stronger than the developing world.

Of course, the developing world includes China, India, Brazil and

Russia. Then onward again you have Frontier markets which is

basically everyone else.

During great times, Private Capital leaves the USA and seeks great

returns. It journey’s first through Europe and Japan, then it runs

through Australia and Canada, until ultimately resting (for a while) in

the developing and frontier markets.

During bad times, Private Capital does the opposite – it returns to the

center for safety.

It’s all very simple. You just have to open your eyes, ignore all of the

noise and see it happen.

There’s just one problem - since the investment industry is

perpetually BULLISH, the ability or opportunity to see Private Capital

flowing away from the periphery and back towards the core doesn’t

happen for most investors.

Of course, the change in direction of capital flow isn’t announced. It

isn’t showing on the TV or on the line.

The beginning shift is usually moving at a glacial pace. In fact, you

wouldn’t notice it if you were looking for it. But once it starts to move,

it gains momentum. And the momentum is reflected across all

financial markets.

Initially, when it is moving across all financial markets – it still isn’t

detected by the masses. Instead, you hear thoughtless reasons to

explain away suddenly, rapid and unexplainable whipsaws.

Some of the worst include blaming China, the Federal Reserve or thewealthy. In reality however, it’s the movement of Private Capital away

from the periphery back towards the center.

With China in the news, here’s a perfect illustration of Private Capital

fleeing trouble.


Source: The Daily Shot


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Play JeopardyIt’s very clear to us that Private Capital in China is leaving. And, it is

leaving for one reason and one reason only – to avoid losses.

Naturally, when $1 trillion leaves a pegged currency, the currency pegHAS to adjust. It’s just plain mathematics. There’s nothing sinister

happening. China isn’t trying to pull the wool over anyone’s eyes.

Many have said that IceCap has been ahead of the curve. Modestly

speaking, yes – our global macro calls on interest rates, currencies

and the global economy have been fairly accurate.

Our view has been based upon two facts:

1) IceCap is agnostic towards all financial markets. In other words,

we have zero incentive to consistently prefer stocks over bonds

over commodities or anything else. This isn’t necessarily an

advantage, rather it simply unshackles us from being tied down to

any one market.

2) IceCap tries to see through all of the noise to really focus on the

big picture. Chart 2 (next page) shows this picture.

What a beautiful chart. It’s so simple, yet it answers the most

complicated question in the investment world.

Question: Why is the world in an economic funk?

Answer: Private Capital is running away from trouble.

Chart 2 shows two variables. The BLUE line shows the amount of

quantitative easing or money printing in the USA. Up until September

2008, the amount of money made available to the economy increased

in a gradual manner. Thereafter it became a gong show.

The RED line shows the Velocity of Money. Velocity of money is just

another way to measure how well the economy is doing. And, while

they are loathe to admit it, it is one of THE most important data points

monitored by central banks every minute of the day.

Velocity of money measures how fast money swishes around an

economy. The faster it swishes around, the faster the economy is

growing. Naturally, the opposite is also true and this is what is

happening today.

“Why is the world in an economic funk?” is the wrong question.

Instead, the correct question to ask is “why is the velocity of money

declining?”

And more importantly, “Why, despite the printing of trillions of Dollars,

Yen, Sterling and Euros, is the Velocity of Money declining?”

The answer of course is quite simple: Private Capital does not like the

actions by central banks and governments, and is therefore

withdrawing their money from the global economy. And it is heading

towards the center of the earth.

Yes, it really is as simple as that. Yet, the irony is that our central banks

and governments have no clue as to the risks they have created



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Chart 2: the big picture

Source: ST Louis Federal Reserve Board FRED Data



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Watch out – it’s comingThey honestly believe their efforts to stimulate the economy is

groovy. But since their stimulus isn’t working – the answer is to do

more of the same.

Maybe we should make them all memorize Einstein’s quote

“Insanity: doing the same thing over and over again and expecting

different results.”

Yes, the insanity continues. And judging by recent actions, it will

continue for a while longer, until that is, the bond market makes

them stop.

Fortunately, we are getting closer to a resolution. And when (not if) it

happens, it will be spectacular.

The question of course is “will you see it coming”?

How much further?The stock market gets all of the attention. Movies and books always

do well – in many ways, the stock market is a boon to everyone.

But not the bond market. Despite being over two times larger, the

bond market receives very little love. Even Hollywood dislikes the

bond market. The only movie about bonds was a major flop with

major losses for the studio and producers (sorry Bonfire of the

Vanities).

Yet, if you want to understand what is happening and why Private

Capital is retreating back to the center of the earth, simply follow the

bond market.

First, know that because the world’s economy is slowing very rapidly,central banks have cut interest rates to ZERO% in many countries. The

hope (there’s that word again) is that these rock bottom interest rates

will encourage people and companies to borrow and spend.

Clearly, this isn’t happening.

And worse still, ZERO% interest rates has created a rather nasty side

effect. Let us explain.

Naturally, there are two sides to every coin. Yet few seem to talk about

the other side of the interest rate coin. One side represents the cost of

borrowing which is set by central banks and it is at all-time record

lows.

The other side of the interest rate coin is the benefit of lending, or put

another way – the interest you receive when you lend your money,

place your money on deposit, or buy safe bonds.

When central banks reduced borrowing rates to ZERO%, they directly

reduced lending rates, or the amount of interest received to near ZERO

as well.

In effect, they threw millions of savers under the bus. Yes, the most

conservative investors in the world have been royally screwed out of



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And the winner is…any chance to earn any interest on their hard earned savings. The irony

of course is that these savers did nothing wrong, yet they are the ones

who are paying for the investment travesties of everyone else.

To summarise, the WINNERS of 0% rates are the borrowers, and the

LOSERS of 0% rates are savers.

But, the interest rate injustice doesn’t end there.

On an even higher level of irony, another group is also sharing the

same side of the interest rate coin and they too are beginning to suffer

big time from these ZERO% interest rate policies.

Yes, we are talking about the banks.

Today, bankers rank quite low on everyone’s “who do I like list.” And justifiably so. Not only do they charge outrageous fees on lending and

credit cards, but the hidden fees on foreign exchange have reached

ridiculous levels. And then, there’s the nickel and diming on

transactions, and account balances. And let’s not forget the 100 page

risk disclaimer notices – apparently, if there’s ever a problem with your

accounts it isn’t the banks’ fault.


These annoyances are not new – everyone is aware of them. And we

shouldn’t be too hard on our banks, after all bankers are people too.

Recent developments within the banking and insurance sector havebeen missed by most. Yet, they are hugely important in understanding

why financial markets are headed towards an interesting experience.

Banks completely rely upon interest rates to make a living. Yes, they

make oodles of money from other sources, but bank lives and die by

the interest rate sword.

The problem for all banks today – regardless of which country they are

in, is the ZERO% interest rate policy set by central banks and the

declining velocity of money.

ZERO% interest rates is ensuring banks earn nothing on their short-

term investment portfolio.

The declining Velocity of Money means the global economy is slowing

(and headed towards recession), which drives long-term interest rates

lower.

Lower long-term interest rates means banks are earning next to

nothing on their long-term investment portfolio.

Now it becomes very clear – interest earned on banks’ investment

portfolios is declining and as the global economy grinds lower, the

amount of interest will decline even further.

Interest Rates WINNERS LOSERS

0% Borrowers Savers

Source: IceCap Asset Management Limited


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Bankers are people tooThe solution?

Banks will become ruthless in CUTTING COSTS everywhere.

Banks will become ruthless in RAISING FEES everywhere.

Consider the following fee rate increase from a Canadian bank:

All fees are increasing AND the minimum balance required to receive a

break on the fees have increased as well.

Next up, understand that declining long-term interest rates signal that

the economy is declining. A declining economy will hurt bank’s loans

which means losses as well as losses in their investment portfolios.

This combination will result in banks having to raise more equity and

regulatory capital. Here’s the recent event for a Canadian bank.


Here’s the story in Italy:

Here’s the story in Portugal:

And the story in Germany:

At this point, we have to remind our readers that in our December

2014 IceCap Global Outlook, we warned everyone with a heartbeat

that the worst investment idea in the industry was to buy European

Banks. Yet that didn’t stop many firms from launching European Bank

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Shallow End vs Deep EndFunds and buying the stocks for client accounts. At the time, it was

believed that European bank stocks were cheap, undervalued, and

treasures that could be held until the end of time.

Well, here are we 15 months and -30% later, European bank stocks

are not the treasure many thought and as Meatloaf said “now, we’re

praying for the end of time, to hurry up and arrive....”

For all of our non-European readers, we suggest you take note. All

banks swim in the same interest rate pool. What is happening with

European banks will wash ashore in Asia next, followed by America

and Canada.

It will happen – be prepared.

The zero interest rate environment is not only wreaking havoc for

banks, it’s also affecting the world’s reinsurance industry.

These companies make money two ways 1) the net difference

between what they collect in insurance premiums and what they pay

out as claims and 2) interest from their investment portfolios.

Because the rest of the investment world has been turned upside

down, many new companies have flocked to the reinsurance industry

to capitalise on a seemingly easy place to make money.

Naturally, more companies entering the game means there is more

money chasing new business. And since there is only so much

business to go around, most companies now have more than enough

capital available. Contrary to what most people would think, excess

capital actually isn’t good – it acts as a drain on the company’s return

of investment.

Since these companies cannot write more business, they’ll have to

earn more interest on their investment portfolios.

But, since interest rates are ZERO% and not much higher for longer-

term rates, reinsurance companies have to cut costs. It’s the only

variable left to increase profits.

And, since these companies are already very efficient, cutting costs can

only be done one way – takeovers and acquisitions. In fact, over the

last year alone, there have been in excess of 30 deals.

Think about this for a minute. An industry that few people even know

exists, has become the hottest place on the merger & acquisition

planet.

And, it is all due to ZERO% interest rates.



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More synonymsTo recap, we have:

1) Banks increasing fees everywhere

2) Banks scrambling to raise capital

3) Reinsurance companies scrambling to merge

All of this is due the scarcity of interest rates.

The reason we share this with you is because cracks in the global

financial system ALWAYS appear in banks first.

And it is quite obvious to us that the cracks have started. By our

estimate, today’s market is equivalent to late 2006 or early 2007. We

could be off by as many as 12-15 months, and until it happens most

investors, advisors and managers will continue to sing along,

whistling happy-go-lucky tunes.

We wish them luck.

Meanwhile, if you find it difficult understanding the banking and

insurance industry don’t feel bad, after all they do play by different

accounting rules than every other company.

Instead, simply follow interest rates around the world. The closer

long-term rates get to ZERO%, and the increase in government bonds

trading at NEGATIVE interest rates, the closer we are experiencing a

fairly big shift in financial markets.

To understand why we expect the bond bubble to end sooner versus

Chart 3: Value of government bonds with NEGATIVE interest rates


later, grab a drink and stare at Chart 3 on this page.

Currently, over $5.5 TRILLION of bonds pay investors a NEGATIVE

INTEREST RATE. In other words, investors are PAYING governments forthe privilege of lending them money.

If you don’t understand interest rates, just accept that interest rates

should always be a POSITIVE #. Otherwise, it just doesn’t make sense,

it’s illogical. it’s ridiculous. It’s absurd. Yet, this is the journey created

by our central banks and governments all in the name of making the

world a better place.


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Merry ChristmasFrom a different perspective – these negative interest rates should be

viewed as your best financial gift ever.

Understanding why this is happening, tracking the absurdity behind itall and monitoring global interest rates will provide you the little

nudge needed to know when the bubble will break. We’re not there

yet. But, we’re getting a lot closer.

No market acts in isolation. Stocks, bonds, currencies, gold, Super

Bowl tickets – they are all influenced by each other.

When the bond market reaches its zenith, it will likely be getting little

fan fare – instead, other asset classes such as stocks and currencies

will still be getting all of the attention (again - sorry Bonfire of the

Vanities).

We anticipate significant capital running away from perceived

dangers, and towards the bond market for safety.

And once this capital is resting comfortably, that dreaded “oops”

feeling suddenly appears, making investors’ faces turn white – thebond market was the biggest trouble after all.


Where Next?2015 was definitely a year for currencies – you were either on the

right side or bad side of the currency fence. While the strength of the

USD has paused for a rest, don’t be fooled into thinking the worst (or

best) is over.

As 2016 progresses, we fully expect to awake some morning and see

crazy movements for all currencies. It will make headlines

everywhere and most certainly be the talk of the town.

Of course, when this happens bond and stock markets will be moving

as well. We really are at the beginning of some incredible marketmovements.

To be informed, watch interest rates and how they are affecting

banks – and then be prepared for a journey, a very special journey to

the center of the earth.


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Be patientOur Strategy

Stocks

Our portfolios have been light in equities for a while now, andconsidering the market declines, this has added value for our clients.

We continue to believe it is naive to use valuation and other

fundamental factors in gauging the health of current markets.

Instead, markets are being pushed and pulled due to volatility in oil,

currencies and interest rate policies.

Market risk remains skewed to the downside. While we are

confident equities will benefit from a sharp decline in bond markets,we are still not quite there yet. Remain patient.

CurrenciesUS Dollar is the king, and will remain King for a while longer. The

surge has paused for a while, but it is a mistake to believe USD

strength is finished – the upcoming surge will surprise many.

CommoditiesOil will not return to >$45 anytime soon. It will settle between $20

to $40 and that’s about it. But, the knockdown effect from lower oil

prices has just skimmed the surface. Companies and select

countries are in big trouble.

Gold is rallying, but it will come back down as USD surges. Be

patient.

As always, we’d be pleased to speak with anyone about our investment

views. We also encourage our readers to share our global market outlook

with those who they think may find it of interest.

Keith earned the Chartered Financial Analyst (CFA) designation in 1998

and is a member of the Chartered Financial Analysts Institute. He has

been recognized by the CFA Institute, Reuters, Bloomberg and the Globe

& Mail for his views on global macro investment strategies. He is a

frequent speaker on the challenges and opportunities facing investors

today, and is available to present to groups of any size.

Our Team:

Keith Dicker: [email protected]

John Corney: [email protected]

Ariz David: [email protected]

Haakon Pedersen: [email protected]

Andrew Feader: [email protected]

Keith Dicker, CFA founded IceCap Asset

Management Limited in 2010 and is the President

and Chief Investment Officer. He has over 20

years of investment experience, covering multi

asset class strategies including equities, fixed

income, commodities & currencies.


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19/19


Announcements


IceCap opens Toronto officeIceCap Asset Management is growing and we’d like everyone to offer

a very warm welcome to Haakon Pedersen and Andrew Feader.

Haakon Pedersen has a PhD in Engineeringfrom the University of Cambridge and is writing

his CFA Level III exam in June. Previously he

advised banks & insurance companies on risks in

their portfolios and businesses during the

financial crises while working for Oliver Wyman

Management Consulting in London, UK. Haakon

joins us as a Global Strategist and is based inToronto, Canada.

T: 1-647-230-8961

E: [email protected]

Andrew Feader is a CFP (Certified FinancialPlanner) and FMA (Financial Management

Advisor). Andrew provides outstanding financial

solutions to private investors, corporate

executives, and many trust and estate structures.

Andrew is in Toronto, as well as Halifax.

T: 1-416-799-1436

E: [email protected]

We want PartnersSince 2010, IceCap Asset Management has consistently

demonstrated a unique and correct understanding of the world’s

global macro environment.

Our ability to communicate this understanding in both our

investment portfolios and through our highly successful Global

Market Outlook is a feature we would love to leverage.

IceCap Asset Management is a growing firm, and we are completely

open to discussing all opportunities, ideas and ventures with other

firms, fiduciaries and individuals anywhere in the world.

Opportunities may include:

1. white labelling of funds

2. sub advisory of funds or managed platforms

3. speaking engagements for small or very large groups

4. joint ventures

5. other corporate opportunities

Contact Keith Dicker 1-902-492-84985 [email protected]

Documents

2016 2 IceCap Global Market Outlook